Sino-African trade has broader prospects

By Wang Le (China Daily)
Updated: 2009-02-11 07:45

Although far apart geographically, China and Africa have enjoyed a long tradition of friendship and economic exchanges.

On the basis of equality and mutual benefit, China has long pushed for expanded economic and trade cooperation with the African countries, especially since the founding of New China and the African countries' success in gaining national independence. A new-type strategic partnership, based on mutual political trust, economic reciprocity and mutual cooperation, has been established between the two under their common efforts,

Over the past half century, China has had active economic cooperation with African countries and offered economic assistance to them within its capacity. In return, African countries have also extended unreserved support to China on numerous international issues. Since the beginning of the 21st century, especially since the convening of the China-Africa Cooperation Forum in late 2006, economic and trade relations between the two have entered a stage of accelerated all-round development. In 2000, Sino-African trade volume was $10 billion, but the figure increased to a record $106.8 billion last year, with an annual average growth rate of 30 percent in eight straight years.

The Africa trade has become a new flashpoint in China's foreign trade in the context of the ongoing economic crisis. Concurring with its widening trade with Africa, the country's investment in the underdeveloped continent has also been on a steady increase in the past years. By the end of last year, the country's direct investment in Africa had transcended $5 billion.

The holding of the 2006 Beijing summit of the China-Africa Cooperation Forum laid a new milestone in the history of bilateral relations. At the summit, President Hu Jintao announced eight measures to be adopted to consolidate cooperation with Africa in the new period and they have been effectively implemented over the past two years. In the spirit of the forum, China has continuously increased its aids to African countries through signing bilateral aid accords or signing preferential trade agreements.

The country has also exempted a number of African nations from repaying debts and set up a special Sino-African development fund to encourage domestic enterprises to invest in the undeveloped but resources-rich continent. It has also dispatched batches of technical experts to Africa to help with their personnel training and technological development. Also, a zero-tariff policy has been adopted on China's import of a wide range of African products, from agricultural products to mineral ores, leather, clothing and wooden furniture. Some economic cooperative zones have been established in the continent, creating many employment opportunities for local people.

As a successful example of cooperation between developing countries, Sino-African economic and trade cooperation has always been in accordance with the Five Principles of Peaceful Coexistence. With a solid political foundation, Sino-African economic and trade cooperation is conducted for a win-win result and common prosperity and has thus gained a strong vitality. For Africa, a deepened economic and trade relationship with China has not only helped the continent improve its infrastructure conditions and change its long-established unitary resources-dependent economic development model, but has also accelerated its industrialization process and improved people's living conditions.

In particular, China's assistance to Africa without any attached political preconditions has greatly helped raise African countries' self-esteem and their self-development capability. For China, a consolidated economic and trade cooperation with African countries has further enhanced its traditional political friendship with the continent and expanded its space on the international stage. Also, cooperation with the continent has made up for the country's resource shortage in its rapid economic development and offered more opportunities for domestic enterprises to advance outbound expansion.

Despite remarkable progress achieved in the past decades, cooperation between China and African also faces numerous challenges ahead. Some frictions and disputes have emerged in bilateral cooperation in ideological, diplomatic and economic affairs in recent years. As more and more of the world's attention shifts to the continent's rich natural resources and its enormous market potential, China is expected to encounter increasingly harsh competitions from other countries in that vast land. However, existing challenges have not weakened the enormous potential for a deepened Sino-African economic and trade cooperation. Bilateral consensus and common stances on international issues have not been reduced.

China will continue to take necessary measures to push bilateral economic and trade cooperation. To expand its trade with Africa, the country is planning to extend the zero export tariffs to more African nations for their export to China from the current 31 most underdeveloped nations and encourage more domestic enterprises to import African products. At the same time, it is scheduled to optimize its Africa export structure in the hope of promoting the export of more tech-tech product and equipment. Taking advantage of the Sino-African development fund and the established economic and trade cooperation areas, the country will continue to encourage domestic enterprises to expand their Africa investment. This is a move aimed at helping African countries step up infrastructure construction, improve traffic conditions and develop some badly-needed processing and manufacturing sectors. As in the past, China will continue to provide African nations with possible help free of political conditions, for projects such as setting up hospital, school, and stadium as well as developing public utility.

Sino-African economic and trade ties have proved to be a successful example of South-South cooperation. With the gradual implementation of various measures adopted in the Beijing forum, relations between China and Africa are expected to enjoy a brighter future.

The author is a researcher with the Chinese Academy of International Trade and Economic Cooperation

(China Daily 02/11/2009 page8)